Small Hydropower Market size is anticipated to surpass USD 6 Billion by the end of 2035, growing at a CAGR of 3% during the forecast period, i.e., 2023-2035. In the year 2022, the industry size of small hydropower was over USD 5 Billion. The rising global population demand for electricity, combined with the growing use of small hydropower in electricity generation, is expected to drive market growth in the coming years.
The increasing financial incentives, policy initiatives, and rising investment in hydropower projects across the globe for rural electricity generation are also estimated to drive market growth across the world in the coming years. The installed hydropower electrical capacity worldwide touched about 1400 GW in 2021, exhibiting the largest share of all renewable energy technologies.
The growing need for electricity with the adoption of digital technology in various sectors is further propelling market growth.
Growth Drivers
Challenges
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
~3% |
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Base Year Market Size (2022) |
~ USD 5 Billion |
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Forecast Year Market Size (2035) |
~ USD 6 Billion |
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Regional Scope |
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Capacity (Up to 1 MW, 1-10 MW)
The 1-10 MW segment in the small hydropower market is predicted to acquire the largest revenue share of about 35% in the year 2035, owing to the increasing demand for the 10 MW capacity of small hydropower. The rising environmental concern across the world about carbon emissions and the increasing focus on the conversion of water energy into electric energy is estimated to drive market segment growth in the near future.
Moreover, the market segment growth is also attributed to the increasing prices of fossil fuels that are used to produce electricity and the development of hydroelectric power in small areas and towns to reduce the expenditure on energy across the globe as per the market analysis.
End-User (Commercial, Utility-Scale)
Small hydropower market from the commercial segment is expected to expand at a substantial rate of around 64% in the year 2035. The increasing concentration on the building of hydropower power plants globally the increasing applications of hydroelectric energy worldwide and the advancements in the designing and construction of hydropower turbines are expected to drive the growth of the market segment in the coming years.
The rising requirement to produce high-capacity electricity owing to increasing industrialization and urbanization is also estimated to have a positive impact on the market segment size.
Our in-depth analysis of the global market includes the following segments:
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Capacity |
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Type |
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End-User |
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APAC Market Forecast
The small hydropower market in the Asia Pacific is poised to account for the largest share of 34% by 2035. The increasing demand for sustainable energy production sources to reduce the dependency on other countries for fossil fuels owing to their rising prices is augmenting the investment in small hydropower projects in the region. The rising need for electricity as a result of the increasing population across the region and the growing electrification of villages in China, India, and Vietnam is also attributed to the increasing adoption of hydroelectricity in the APAC region. As per the data by the International Hydropower Association (IHA), 14,446 MW of new hydropower capacity was added in 2019, in East Asia and the Pacific, while 1609 MW capacity was installed in South and Central Asia.
The increasing government subsidies and incentives for manufacturers and consumers and the number of hydro turbines installed across the coastline of the region to improve the electricity generation capacity in the local regions to meet the demands in rural areas and improve economic growth are also expected to boost the market growth.
North American Market Statistics
The North America small hydropower market is estimated to be the second largest, registering a share of about 27% by 2035. The increasing adoption of hydropower in the United States and Canada, backed by the presence of key market players and the increasing private investment in hydropower with an interest to develop new ways to increase production and decrease the cost of maintenance and installation is estimated to create new opportunities for market growth in the region.
Further, an increase in the adoption of renewable energy to reduce the environmental pollution caused by the emission of greenhouses together with the rising construction of dams and reservoirs is anticipated to rise the demand for market growth. As per research, the U.S. Department of Energy announced USD 8 million in funds to carry out projects that will build the flexibility of the U.S. hydropower fleet, improving electric grid credibility.
Author Credits: Payel Roy, Dhruv Bhatia
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